Aar (AIR) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01We are affected by factors that adversely impact the commercial aviation industry
2. 02Adverse events that occur in the aviation industry generally may adversely affect our reputation, which may adversely affect our business, financial results, financial condition and stock price
3. 03Our U.S. government contracts may not continue at present sales levels, which may have a material adverse effect on our financial condition and results of operations
4. 04We use estimates when accounting for long-term contracts and face risks of cost overruns and losses on these contracts
5. 05If our subcontractors or suppliers fail to perform their contractual obligations, our contract profitability and our ability to win new contracts may be adversely affected
6. 06The success of our Repair & Engineering business segment is dependent upon our ability to manage our operational footprint
7. 07The success of our Repair & Engineering business segment is dependent upon continued outsourcing by the airlines
8. 08Our operations may be adversely affected by a shortage of skilled personnel or work stoppages
9. 09We operate in highly competitive markets, and competitive pressures may adversely affect us
10. 10We are exposed to risks associated with operating internationally
11. 11Acquisitions, which are a part of our business strategy, expose us to risks, including the risk that we may be unable to achieve the anticipated benefits from the acquired businesses
12. 12Circumstances associated with divestitures could adversely affect our results of operations and financial condition
13. 13Market values for our aviation products fluctuate and we may be unable to recover our costs incurred on engines, rotable components and other aircraft parts

Risks Related to Technology and Intellectual Property

1. 14Our business could be negatively affected by cyber or other security threats or other disruptions
2. 15with regulatory compliance. We expect to continue to experience some of these types of cybersecurity threats and incidents, which could be material in the future
3. 16We may need to make significant capital expenditures to keep pace with technological developments in our industry and we may not be successful in doing so
4. 17We do not own certain intellectual property and tooling that is important to our business

Risks Related to Financial Matters

1. 18Our debt exposes us to certain risks
2. 19We are dependent upon continued availability of financing to manage our business and to execute our business strategy, and additional financing may not be available on terms acceptable to us
3. 20Restrictive covenants in the documents governing our existing and any future indebtedness may limit our current and future operations, particularly our ability to respond to changes in our business or to pursue our business strategies
4. 21We may not be able to fully execute our stock repurchase program and may not otherwise return capital to our stockholders in the foreseeable future

Risks Related to Legal and Regulatory Matters

1. 22If we fail to comply with laws and regulations governing federal contractors, we could lose business and be liable for various penalties or sanctions
2. 23We are subject to significant government regulation, which may cause us to incur significant expenses to comply with new or more stringent governmental regulation and may subject us to regulatory actions, which may adversely impact our business, financial condition or results of operations
3. 24Our industry is susceptible to product and other liability claims, and claims not adequately covered by insurance may adversely affect our financial condition